Why The Poor In India Are Finding It Harder To Secure Their Own Houses

How would you react if the government suddenly allocates your land to a developer and orders you to vacate the plot within a month?

“But I own a flat in this building, and the land has been legally allocated by the government for the co-operative housing society. Here are the papers.” – this would possibly be the immediate retort. The response would be a valid one only for those belonging to the top 10% of the country’s socio-economic hierarchy. They are the ones who would find it difficult to imagine a situation where the rights to their legally-owned houses are being questioned.

A new report on understanding the needs of dwellers in informal houses in India highlights the issue brought forth by the example above.

On February 15, 2017, FSG, a mission-driven social impact firm, launched its report titled “Informal Housing, Inadequate Property Rights” at the Nehru Centre in Mumbai. The event started with an overview of the report by Vikram Jain, one of the three authors along with Subhash Chennuri and Ashish Karamchandani. The most crucial aspect of the presentation was the statistical data on the issue, which was previously unavailable due to a dearth of consolidated data on the subject.

The data in the report had been rigorously compiled by FSG. The research involved reviewing 40 reports, speaking with 56 experts and conducting more than 500 qualitative and quantitative interviews of informal housing dwellers across Delhi, Pune, Hyderabad and Cuttack. A few of the key figures and findings from the report are:

1. The growth of urban population and the shortage of planned, affordable housing in India have led to 26-37 million households (33%-47% of the urban population) living in informal dwellings (slums and unauthorised housing).

2. The availability and quality of basic services for families in informal houses has not kept up with the pace of urbanisation. Hence, the top-ranked ‘needs’ are toilets (44%), water (36%) and drainage (28%).

3. 50% of families in informal houses have some fear of eviction, but a majority of them are willing to invest and improve their dwelling units.

Vikram unpacked the issues through the real-life story of Meenakshi, which shed light on the statistics and put them in perspective. Meenakshi is an informal housing dweller who works at a tailor’s shop. Her husband is a driver and her children go to an affordable private school. The couple has been working hard and has managed to buy a TV, a cable connection and a mobile phone.

However, despite the presence of taps and community toilets in the area, access to basic health and sanitation is a problem that the family deals with every day. The fear of eviction is always on her mind, since she has been sanctioned a government property to which she has a de facto right (holding a position, not necessarily recognised by law) and not a de jure one (legal entitlement).

The investments in building her house come from her meagre savings. Although she would like to take a loan of ₹2 lakhs, the lack of any documented collateral puts such an option beyond her reach.

These were the points that led to a stimulating panel discussion. The discussion was facilitated by Ashish Karamchandani. The panel included eminent experts from the fields of academia, government and development studies. Arun Kumar Misra, a former secretary in the Ministry of Housing and Urban Poverty Alleviation, Gautam Bhan, a lead researcher at the Indian Institute of Human Settlements (IIHS), Veena Mankar, the founder of Swadhaar Finserve and Shreya Deb from Omidyar Network, a philanthropic investment fund which sponsored the report, were the panellists for the discussion.

Veena Mankar started the discussion by talking of her experience of working with local communities through Swadhaar. She highlighted how the best social solutions emerge by engaging at the grassroots level. However, the biggest problems of the people at the lowest rung of society’s ladder arise from ‘vulnerability’. This vulnerability stems from an uncertain daily income and a a sense of deep insecurity. They are not sure whether they would be able to buy food daily or have a roof above their heads. Unfortunately, in spite of these hardships, they often end up paying more than the rich and affluent to procure basic and essential services.

Gautam Bhan explained the ‘vulnerability’ point in further detail by giving a historical perspective of the Slum Areas (Improvement and Clearance) Act, 1956. He highlighted how the original intent of the Act was to address ‘vulnerability’. However, the fundamental aspect of addressing vulnerability has been lost in today’s interpretation. Nowadays, slum dwellers are primarily looked upon as encroaching on public land. He cited a case from Ahmedabad, where the government had granted a ’10 year no-eviction guarantee’ to slum dwellers. This ensured that they had sufficient time to build their lives and eventually move up in the economic pyramid.

In Gautam Bhan’s words – “Acknowledge what people have already done. They have built their own homes – without any affordable housing assistance. We have to protect their time, and give them a sense of security.” This was one of his recommendations to solve this complex issue.

Arun Misra added perspectives from the government’s side. He highlighted that due to the political nature of this issue, successive governments had adopted the liberal policy of assuring informal housing dwellers that they won’t be evicted from their homes. He also pointed out the inadequacy of the Census’ definition of a ‘slum’. The current definition can only be applied to a select ‘clusters of houses’, primarily for cities in north India. However, ‘slums’ in the states of north-east India would be ignored by this definition.

On the other hand, Shreya Deb tried to explain the concept of the ‘market’. She highlighted the need for Microfinance institutions to charge interest rates as high as 20-25%. She explained this as a precautionary measure against the risk of lending to individuals without valid property documents.

In her words – “If you are going to take a loan for ten years, then the lender needs to know that the home is going to be there after 10 years.”

The report aims to start unpacking the problems of the informal housing sector in India. The panel discussion addressed the core issue of ‘vulnerability’ which confronts dwellers on an everyday basis, but remains practically absent in policy discussions. What complicates the issue is the ‘market forces’ acting upon these dwellers. Unfortunately, Adam Smith’s ‘invisible hand‘ favours the real estate developers who show little hesitance in tearing apart informal settlements and the lives of dwellers in the name of ‘development’.

What exacerbates the issue even further is the dilemma that every government faces – a ‘trade-off’ between reducing government expenditure and providing basic services to more than 30 million informal settlements. The recommendations in the report and the insights that emerged from the panel could well combine to form great inputs for policy-level discussions and debates to solve this complex issue.

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